The financial regulators screwed up so let's, er, strengthen the financial regulators

Tony Sharp has punctured Vince Cable's triumph. The Lib Dem treasury spokesman's leaked information about FSA errors was published in the Financial Times (Britain's most Europhile newspaper) with key parts of the text blacked out; but if you cut and paste the text into Word, you can see the names of the building societies concerned. Ouch! (Hat-tip, Iain Dale.)

Still, this little embarrassment aside, the episode reminds us of the monumental uselessness of the Financial Services Authority. The FSA embodies Christopher Booker's phrase "using a sledgehammer to miss a nut". While having all sorts of baleful unintended consequences, it failed in its intended consequence. It tied up the financial sector in pointless red tape, while missing the real disasters that were unfolding under its nose.

How does Gordon Brown intend to punish the FSA for screwing up? By giving it more money and more power. Prime Minister, we've already tried this. The FSA budget has nearly doubled during the ten years of its existence, and its staff has grown from 1,362 to 2,535. They are to get their bonuses as planned. And, from now on, we shall have more of them. This is how Britain is governed today: by and for its quangos.